Thursday, October 30, 2014

From quarterly losses to questions about it's $600 million cloud vendor deal with the CIA, Amazon as a company has been feeling the heat of late and with the company's excessive focus on the top line to the detriment of their bottom line and continuous expansion into field uber-competitive fields, the temperature is set to ratchet up for years to come.

While it's refreshing to see a company not hamstrung by short term thinking and the need for growth every quarter, Amazon, has finally paid the price for the strange strategy of expanding the company at the expense of their already slim margins when the company reported a quarterly loss of $437 million and is expecting to report another quarterly loss in the next earning report. News of the loss saw Amazon's stock plunge 10% as investor have finally grown weary of the company focus on topline growth. Amazon release of it's own smartphone, Amazon Fire, was cited as the main culprit for the quarterly loss as well as losses accrued in it's international business particularly china where , according to the financial times, they have made little headway on market share (only 2%) and are eating losses of an estimated $600 million a year.

However the main problem seems to the rapid in Amazon's expenses as according to BBC News, the company's acquisitions "has hurt profits at the firm, with with operating expenses growing to $21.1bn, compared with the $17.1bn last year". While any Amazon executive you could get your hands on would cite the company's topline growth and investments for the future, the numbers tell a different story that investors are now paying attention to. Amazon's almost pathological focus on revenue as opposed to profit has other business figures putting in their two cents as former Microsoft CEO and current owner of the LA Clippers franchise Steve Balmer took to Charlie Rose and lambasted the company not being a 'real business' as, in his words. "they make no money".

Balmer point is punctuated by the damning fact that while the company brings in large revenues and sales growth, they continue to lose money and even worse the trends doesn't seems to phase it's management. surely the smart men and women at the head of the corporate behemoth that is Amazon should realise that the reason why the company has to take out $2 billion loan from the Bank of America is because there has been no bottom line growth for three years.

Amazon has been able to justify it's crazy spending spree on its' large war chest but that's not a good reason to neglect the bottom line especially in light of their wafer thin margins. The release of the Amazon Fire smartphone is another example of the company's strange business strategy as the phone has been critically panned and sold poorly leaving the company with millions worth of stock they can't shift. to illustrate how poorly Amazon Fire sold, Amazon are offering the phone for just $1 months after introducing the phone at the top end of the market for $199.

In short, Amazon are finally paying the price of neglecting their bottom line in favour of revenue and sales growth and this strange strategy may end up biting the company where it hurts and, we suspect, the company is alreeady feeling the pinch.

Sunday, October 12, 2014

The Big disrupt exists for the
sole of exploring new disruptive technologies and companies shaking things up
in business and culture and no technology in recent years has shaken things up as
much as cloud computing or better known as the cloud.

The main benefit the cloud
lends to organizations big or small is agility and thus the ability to respond
quickly to the needs of customers. The agility the clous lends also a major
driver to its adoption as organizations everywhere as the phrase “adapt of die”
is not just snappy saying you’ll find on a bumper sticker but the organizing
principle of modern business.

The cloud has had many
implications for business because of the agility it offers organizations but
this has had a serious impact on the role of the Chief Information Officer
(CIO). The advent of the cloud has transformed IT from a traditional
maintenance cost centre and even a potential obstacle to progress to one of the
key drivers of innovation and even future growth in a number of organizations.

The change in mentality among
CIO’s in light of advent of the cloud has IT has CIO’s looking at adding value
the business illustrated by a 2012 poll of CIO’s that recorded a substantial
focus among CIO’s on revenue growth as “81 percent of respondents see revenue
growth as a crucial priority” alongside
customer facing priorities such as “Customer satisfaction (78 percent),
improving product capabilities (69 percent), cost cutting (65 percent) and the
ability to innovate for competitive advantage (57 percent)[1].

This more business focused
approach to IT among CIO’s encouraged by the onset of the cloud has had CIO’s
looking for ways to add value to organizations as while the cloud has given, by
default, greater responsibility over how organizations operate, this has led to
leaders in organizations to openly question the value their IT departments
actually brought to the business. This public audit of the CIO in relation to
other executives in the C-suite, particularly the Chief Marketing Officer
(CMO), has forced CIO’s to take a greater interest in the business side of the
organizations they serve as the growth of importance of CMO’s as well as the
increasingly data driven nature of the role has led to predictions of IT
departments to see cuts in their budgets as “organizations move maintenance-intensive
tasks into the cloud”[2].

This new reality confronting
the CIO provides a great opportunity for CIO’s to maximize their importance to
their respective organizations but in doing so this makes them more accountable
than ever before and with such accountability the role of the IT leader in an
organization becomes more precarious as NetApp CEO Tom Georgens observed ““The
opportunity for CIOs to differentiate and provide competitive advantage for the
firm might be greater than it's ever been. However, the risks associated with
being a CIO are also greater than they've ever been."”[3].

However, while most CIO’s have
embraced their new role in the advent of the cloud, the actual department he or
she runs might have different ideas. Martin Ogden, CIO of Expro Group, came up
against this apprehension among his department as he received pushback when introducing
a cloud based HR tool designed to manage the company’s growing number of
employees across the globe.

While Ogden was keen to play up
the benefits of the tool to the organization and sees as a glaring opportunity
for his department to add value, his department was clearly concerned that the
tool was “ the project was largely delivered by HR, rather than IT”[4].
However their concern was largely peaked by Ogden’s and clearly Expro Group’s
intention to move more processes into the cloud, However. Their concern for
their jobs didn’t seem to bother Ogden who saw it as a opportunity for “those
reasonably well paid, highly skilled members of staff and actually get them to
do something useful for the organisation.”[5].

In that one sentence above
revealed not only the apprehension IT departments have towards the cloud but the
rather snide attitude the new breed of CIO has towards his own department
reminiscent of Alec Baldwin’s classic “always be closing “ speech in the
expletive heavy screen adaptation of playwright David Mamet’s masterpiece
Glengarry Glen Ross.

Why CIO’s like Ogden would have
such an attitude towards his own departments makes no sense given the advent of
the cloud and its commercial availability allows other departments to bypass
the CIO and complicate his role in the organization at the same time as
increasingly other executives in the C-suite now have their own IT spend.

What’s also strange about the
CIO poking at the futility of his department is that the arguments that IT or
the CIO is becoming is a very stupid argument in an gage where just about every
business is a technology whether they like it or not. In this new reality where
the arbitrary line between technology and business begins to blur, the CIO is
arguably going to be one of the most important roles in any business going away
as doing business in the modern world, for better or worse, has become technical
question as much as an economic one.

In sum, the advent of the cloud
has shaken up the C-suite and the CIO in particular but the cloud in doing this
has only revealed a simple but telling truth about the business world, there
isn’t much of a dividing line between tech and business and in the future, no
one will able to tell the difference.

The hit AMC show begins its fifth season tonight and we're going to review every episode and track the fate of Rick and co in a season, going off the badass trailers released by AMC in recent weeks, could be the best season in the show's run as for once, the group are not in control and are in mortal danger as the shows proves again and again that in a world full of mindless and soulless zombified killing machines, humans are still the number one threat.